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Aspirin in Cardiovascular and Cerebrovascular Events: Does Market Failure Matter?

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Author(s): Roger L. Mendoza

Journal: American Journal of Economics and Business Administration
ISSN 1945-5488

Volume: 3;
Issue: 3;
Start page: 543;
Date: 2011;
Original page

Keywords: Aspirin | cardiovascular | cerebrovascular | externalities | information | market failure | Pareto-optimal | principal-agent problem | prophylaxis | risk | risk compensation | transaction costs

ABSTRACT
Problem statement: Two interrelated questions were raised for investigation in this study: (1) why may government intervene in an otherwise private transaction between physician and patient and between drug manufacturer and buyer? (2) Does government intervention make a difference in what these transacting parties would otherwise have decided or chosen in its absence? Approach: An internet literature search was performed, using query term combinations, to identify aspirin-related studies. The search yielded 51 juried publications that met our predetermined criteria for inclusion and thematic analysis. Results: Some variance exists within the surveyed literature concerning government intervention in aspirin prophylaxis for cardiovascular and cerebrovascular events, particularly heart attacks, strokes and cardiovascular death. This study identified 4 instances of market failure that offer some of the strongest theoretical and practical considerations for public policy intervention in aspirin’s pharmacological information. However, there is also indication that the sense of increased protection arising from safety regulations could stimulate risky behavior that nullifies their net protective effects or benefits. Conclusion: It is not clear either from the surveyed literature or existing economic theory if, ceteris paribus, mandatory safety information is necessary to alter or modify the marginal propensity of a physician to recommend and a patient to purchase, aspirin. The study suggested the need for policy reinforcements to any safety information regulation, if market failures are to be effectively addressed and risk compensating behavior reduced.
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